IFS

Yesterday I mentioned a survey I helped IFS North America conduct on the impact of mergers and acquisitions on the enterprise applications market. In that same survey of executives and professionals of manufacturers with annual revenues in excess of $100 million we also investigated the requirements for industry specific functionality. We looked at the importance of industry-specific functionality in enterprise applications, investigated how well those needs are met and explored the impact lack of fit might have on the business.

We reached over 340 of these manufacturing executives and found 67% of them required industry-specific functionality and even those that did not still expressed a desire for it. Those who require industry-specific functionality were 12% less likely to have implemented ERP, leading us to believe that not finding a proper fit caused some to delay a purchase, but if implemented, those requiring industry specific functionality rate the fit of their current applications only slightly lower than those who have no industry-specific needs. Solutions are out there if you know where to look.

As you might expect, gaps are often filled with additional applications and spreadsheets. And those requiring industry-specific functionality were more likely to have implemented other applications like Customer Relationship Management (CRM) and Project/Portfolio Management (PPM). And those requiring this added functionality are 66% more likely to require multiple applications rather than being satisfied with a single integrated suite. Gaps in functionality definitely add risk and present barriers to serving customers.

While industry specific functionality is much in demand among the respondent base, vertical industry is not a good predictor of which businesses require greater specialization in ERP. A better predictor may be the types of processes businesses are involved in. Those involved with extensive customer collaboration in high value, complex projects reported a greater need, as did those involved with management of large fixed assets (think heavy duty machinery) and service management. Among those companies with the most pronounced need for greater specialized functionality were those where managing return on assets (RoA) is a core discipline. The need for ERP with enterprise asset management (EAM) functionality creates a “perfect storm” that many enterprise solutions do not handle well. Of course this was music to the ears of IFS since these types of businesses are exactly the type it targets with its extended ERP solution, which also includes Enterprise Asset Management (EAM) and field service functionality.

So how do gaps in solutions impact the business? Regardless of the need for industry specific functionality or not, the most likely impact is the need for non value added work like double entry in multiple systems, negatively impacting productivity. But where the lack of industry specific functionality had a more direct impact was in added risk resulting from not having the needed visibility to the business and in limiting the ability to adequately serve customers.

Earlier this fall, I helped IFS North America conduct a survey of executives and professionals of manufacturers with annual revenues in excess of $100 million. The purpose was to better understand the impact on customers when enterprise application solution providers are acquired. The ERP market in particular has been undergoing consolidation for years now. I remember back in the mid-1990’s Manufacturing Systems magazine used to publish a “top 50” ERP vendor list (solution providers were ranked by size). Soon that “top 50” list became a “top 100” list because there were so many ERP vendors. After more than a decade of consolidation, if that list existed today it would probably be a “top 20.”

As an interesting aside, the publishing industry underwent similar consolidation. Manufacturing Systems became Manufacturing Business Technology (MBT) magazine, owned by Reed Business Publications, who later sold it to Advantage Business Media. And in fact, Advantage Business Media was instrumental in collecting over 340 qualified responses to this survey.

Some of the areas we explored were:

What percentage of companies is impacted by acquisitions of enterprise application solution providers?

How are these acquisitions perceived?

What actions are taken by customers post-acquisition?

What concerns do customers have when the enterprise software they use is acquired?

Over half (54%) of the survey respondents have “experienced” one of these acquisitions. Acquisitions that result in broad portfolios of products are not necessarily viewed negatively but this will depend on the nature of the portfolio. Only 10% express no concerns whatsoever upon acquisition. Concerns primarily arise over the continued support and innovation of products that are acquired.

Most (86%) continue to run the acquired software post-acquisition. The majority (68%) simply intend to continue to run the software, hence the need for that software to continue to evolve. But 18% are considering replacement and when they do, the incumbent vendor does not necessarily have the advantage. A search for replacement is more than 3 times as likely to be put out to bid. Fourteen percent (14%) plan to replace it through a competitive selection while only 4% plan to replace it with a product offered by the acquiring company. Of course even among the 14% the new company may be considered in the “competition” but aren’t necessarily any more likely to walk away with the deal. And in fact, where a replacement has already occurred, a new vendor was chosen 71% of the time, a new vendor is chosen. Only 4% replaced it with a product from the acquiring company while 10% replaced it with an offering from a different vendor.

This isn’t surprising because throughout the consolidation that has occurred, I find companies develop much more loyalty to a product than they necessarily do to the company that owns it, particularly when ownership changes multiple times. The vendors often gain much more from the acquisitions than the customers.

GOALS OF M&A

Vendors may have a variety of goals when they engage in acquisitions, and these goals often have nothing to do with better serving the customer. One goal is to grow market share. Growing a customer base through acquisition often creates a step function. Instead of selling one customer at a time (gradually), the installed base grows in large blocks of hundreds or even thousands at a time. Because so much of an enterprise application vendor’s revenue comes from recurring maintenance revenue, this can be an immediate and significant boost.

Acquisition can be a cheaper way of growing a customer base, but that assumes the acquiring company is good at it – good at integrating the new company, formulating product plans and executing that strategy. Some are better at it than others and some become good at it only after learning from mistakes of prior acquisitions. When you see ERP companies acquiring other ERP companies this is often the goal.

Yet another goal of acquisitions is to grow the share of the customers’ wallet. By acquiring complementary solutions that fill gaps in the product line, the acquirer creates more potential for cross sell and up sell opportunity. Now of course, this may not happen immediately. No acquisition comes with a magic wand that instantly integrates products, although in some instances, where the two vendors have previously partnered, the integration may already exist. But there is no guarantee that integration is seamless. For many acquiring companies though this fills product gaps faster than doing the pure development route. Although with the introduction of agile development methodologies the difference is not as dramatic as it once was. But it also can be a means of strengthening internal expertise immediately.

And the final reason for acquisition is to enter new markets. These may be new geographies, particularly in emerging markets. Or they may be new industries.

SO WHAT’S IN IT FOR THE CUSTOMER?

In some cases, acquisitions benefit the customer if they place an acquired vendor (or even the acquiring vendor) in a stronger financial position. M&A activity can “bail out” struggling companies, preserving legacy solutions and companies that may otherwise simply vanish. When vendors use M&A activity to grow their share of the customer wallet, customers may immediately benefit from having access to a broader solution from a single vendor. There may be synergies between merged companies/solutions and there could be an accelerated (or slowed) innovation processes’

When the goal is to enter new markets, there is little to no customer benefit unless the customer is in (or is entering) a market that is underserved by the original vendor. But that probably means the original selection of that product was questionable.

Given the fact that the vendors often have more to gain than the customers, it is not surprising to see concerns. These concerns can be summed up as follows:

We could wind up running a collection of separate point solutions owned by the same vendor instead of a well-integrated ERP (58%)

The product we use may not be well integrated with the rest of the product portfolio (55%)

The owner of the product may not continue to invest in or evolve the product in the future (48%)

The product may be discontinued, forcing us to move onto another product from the same vendor (33%)

Rounding out a solution portfolio is commendable, but don’t forget integration. If all you have done is reduce the number of vendors a customer deals with you are not really adding value in the eyes of the customer

SOME ADVICE TO ACQUIRING SOLUTION PROVIDERS:

ADVICE FOR USERS OF PRODUCTS THAT MIGHT BE ACQUIRED:

Get the facts. Hold your vendor’s feet to fire in terms of product road maps. But recognize that continued development of the product you are running might not be a good business decision for your new vendor. But it also may not be best for you, particularly in the case of a legacy ERP developed on older technology. ERP used to be viewed as brain surgery. Don’t do it unless the patient is dying. Today I would recommend viewing it like joint replacement (think knees and hips). Even if the joint is painful, you suffer along with it as long as it doesn’t severely handicap your ability to function. But when it becomes too painful, or too limiting, it is time to undergo the surgery. ERP replacement can be like surgery – it can disrupt your life. But if the quality of life post-surgery is vastly improved, it was worth the effort.

Back in May I posted some commentary and a warning not to confuse how you buy ERP with how you deploy it. There is much written today about deployment options in general and cloud computing in particular. Although how you pay for ERP is different from the way it is deployed, the two are definitely intertwined because you will either be paying for software or you will be paying for a service or both. This service is not to be confused with the consulting and implementation services you may contract for. This is either software as a service (SaaS) or hosting services, which may also be combined with Application Managed Services (AMS), where the company hosting the software also manages the applications and perhaps even the business processes the software is used to model (e.g. Accounts Payable or Accounts Receivable). But how are companies generally paying for ERP these days?

Just to recap:

Enterprise application software is typically not bought and sold; it is instead licensed for use. It may be licensed to be used by a company, on a particular computer or by other criteria such as number of users. This is similar to consumer software. Buying it once doesn’t mean you can duplicate it and share it with all your friends, or even sometimes use it on all your own computers. For enterprise application software how you pay for that license and the term of the license can vary tremendously.

A software license can be perpetual. Early findings from our Mint Jutras 2011 ERP survey indicate that 76% of responding companies have perpetual licenses. That means you pay for it once and can use the enterprise application forever. Maybe. This used to be the case, but more and more often today a perpetual license agreement might have a stipulation that you have the right to use that software only for as long as you continue to pay maintenance to the software vendor that provides the product. In fact, if you are buying ERP today, expect this requirement to pay a recurring maintenance fee in order to continue to use the software. In our survey 62% of those with perpetual licenses have this requirement.

A maintenance agreement, which is a recurring cost, typically provides both technical support and certain innovations. Some of those innovations will be included in your maintenance fee and others may still need to be purchased. Maintenance is typically priced as a percentage of the software license and the going rate at list price today is around 22% for ERP. While anecdotal evidence tells us that most companies actually pay less than this (closer to 16%-18%) this is largely due to specially negotiated rates and older rates that have not necessarily escalated at the same pace of increased list prices. But if you are purchasing a new ERP solution, expect this to be the starting point for negotiation.

But perpetual licenses are not the only type offered. Instead your license might be for a specific period of time. This is generally referred to as a “term” license. At the end of the term, you must either renew the license or discontinue use of the software. In fact the application might have the equivalent of a kill switch in it that will disable it and prevent you from continuing to use it at the end of the term. This type of license is less common and in fact only 7% of our survey respondents indicated this was how they paid for their ERP. Effectively managing this type of license requires some license management code to be embedded in the solution and this was not always done, particularly in older legacy software. If it was not, and you don’t renew, you are in breach of contract and you might find some software auditors on your doorstep.

Subscription-based pricing is another alternative, particularly for those who are looking to expense their investment as an operating expense rather than a capital expense. About 15% of survey respondents pay by subscription. You might pay a nominal startup fee, but you avoid the big front-loaded expense of a software license. Unless this is coupled with a SaaS deployment, this does not necessarily address the up-front cost or the on-going expense of the hardware. Only 28% of the subscriptions paid by our survey respondents were SaaS-based. Running in a hosted environment where the supporting hardware costs are embedded in the subscription fees may indeed address these capital costs and allow you to account for payment completely as an operating expense.

The findings noted come from the 2011 Mint Jutras ERP Solution study. Look for more data to be shared in the upcoming weeks. If you are in any way involved in the selection, management, maintenance or use of ERP in your company, please participate in our survey. By doing so, you will receive the full executive summary and also have access for inquiry to Mint Jutras for a 6 month period. Your contact info is entirely optional but we will need your email address to deliver your report and an access code for inquiry. Mint Jutras makes it a policy to never share contact info under any circumstances.

“Ease of use” and the “user experience” are getting a lot of play these days. But what does that really mean? I currently have my inaugural Mint Jutras ERP survey live and have collected more than 200 responses thus far (just the beginning!) So far, results show that ease of use most likely refers to time to complete tasks (50% picked this as a “top 3” in importance) and intuitive navigation (42%). Of course some other factors were also important including easy access to ERP from anywhere, any time (think access through the Internet and mobility) and the ability to stay in a workspace that combines ERP with other tools (e.g. email, Internet, dashboards, etc.)

In addition, earlier this year I helped IFS North America with a study conducted to explore how usability challenges may cause individuals to work outside the system of record, causing the manufacturer to lose value as employees use other systems. We looked at the degree to which corporate citizens will take action as the result of enterprise software usability challenges (including the use of various types of PC-based software and online free or low-cost applications). We were also looking for generational differences by comparing respondents in four different age groups:

18 to 35 years old

36 to 45 years old

46 to 55 years old

Over 55 years

In general, we found there was a generational difference. Once established in their careers, respondents were more likely to speak up about usability challenges in enterprise software. Instead, younger professionals (between ages 18 and 35) were more likely to change jobs as the result of poorly-designed enterprise software. So if you want to keep those future superstars, beware!

The quip “ERP stands for Excel Runs Production” is often true. When faced with usability challenges in the enterprise system of record, Microsoft Excel is the most frequent alternative. In addition, when faced with usability challenges, respondents indicated they may also use a number of free or low-cost online tools including Google Docs and Dropbox.

Speaking Up

Counter to popular perceptions of younger generations in the workforce, the 18-35 year-old group was least likely to definitely speak up or complain about the poor user experiences they were having with enterprise software. Those over 35 were most likely to definitely say something but extremely unlikely to simply suffer in silence. This pattern may be due in part to the fact that younger managers may feel, perhaps with justification, that they lack influence within the organization so speaking up would have no effect and possibly jeopardize their careers.

Meanwhile, those most likely to say something about their negative software experiences were respondents over 45 years, who would have more influence and also a good deal of experience with both business and consumer-level technologies and have begun to expect the same ease of use in business as they see in consumer technology.

Opting Out

More than 30% of respondents in each age group indicate that they would be likely to use enterprise software that was hard to use or poorly designed less frequently than software that was more thoughtfully designed or easier to use. A sizable majority of respondents also indicated that they were prone to using spreadsheets, including Microsoft Excel, instead of their enterprise system of record . In fact, respondents aged 18 to 35 were most likely to use spreadsheets (75%). Anyone graduating from college or business schools within the last 10 years (at least) has gained extensive experience with Microsoft Excel, seeking the comfort level of familiarity.

Commentary

Some comments and suggestions offered to Enterprise Application solution providers by respondents:

“The interface needs to be seamless and intuitive. We don’t have learning curve time anymore.”

“Make it able to be seen more easily from smart phones.”

“Take lessons from the most popular software interfaces – Microsoft Office, Google, iTunes, etc. There is nothing more frustrating than using an interface that looks like it’s from an AS400 in the 80’s but was purchased last year.”

“Just show me the information I need and don’t waste my time with ‘pretty’ graphics.”

In general the message was clear. It is all about faster, simpler, cost effective.

I’ve been “watching” ERP (Enterprise Resource Planning) for more than three decades now. You might even say I’ve been watching it before it even existed, before it emerged on the market, when it was still a twinkle in the eye of software companies. You see, back in the 1970’s most of the software industry looked with disdain on “packaged” software. Everything was pretty much home-grown or custom developed back then. After all, how in the world could you possibly write software that would really meet the needs of a wide range of companies? Back then of course, all companies were “different” and therefore software had to be developed to meet those unique needs. Right?

The answer even back then was really, “No, of course not.” Each and every company was not really that different. Every for-profit company took orders, delivered goods or services and paid their bills. Manufacturers bought components or ingredients and made things. Distributors moved goods. Retailers procured, stocked and sold product. Even non-profits needed to balance their books and produce financial statements. All but the very smallest companies had payroll to meet and taxes to pay. Yet business processes were/are not identical from company to company and each had/has their own nuances. Back in the 1970’s god forbid, if a software company dared to question how things were done, or worse, attempt to change policy or procedure. If something had to change, it was definitely the software. And back then, that meant mucking around deep down in the source code. And it was even worse if the file or database structures had to change.

When you look at it from this perspective you realize just how far we have come. Back 30 years ago, data entry clerks (dare I say even key punch operators?) and data processing (the predecessors to IT) departments were the only people who actually “touched” software. The only thing management touched was the mountain of paper produced as output and that paper was green bar, continuous forms that might or might not be “burst” into individual pages. Thirty years might seem like a life-time to those in Generation X, Y or the new iY. But to Baby Boomers who entered the job market during the 1960’s and 1970’s it seems like just yesterday.

ERP has of course evolved from MRP which originally stood for Material Requirements Planning, then expanded to include more than materials and became Manufacturing Resource Planning. Somewhere along the way there was an MRP II, but at this point in history the difference “II” added doesn’t much matter anymore. Then as the footprint of the software grew to encompass other aspects of the business, MRP merged with accounting applications and morphed into ERP. It broke free of the boundaries implied by Material and Manufacturing, to be an enterprise application for all types of industries. Some struggle to define ERP today. I don’t. I define it as an integrated suite of modules that forms the transactional and operational system of record of the business. But the boundaries of ERP have steadily grown to include a broader and deeper footprint, to the point where ERP is not really confined by any boundaries.

Back in the 1970’s, nobody would have conceived how far we could go in the next 30+ years, just as we couldn’t conceive of having the same (or more) processing power clipped to our waistbands as that which used to require raised floor, climate-controlled rooms. So where are we going now? All the rage of course is:

Cloud computing: operating ERP in a hosted environment, public or private clouds, buying Software as a Service (SaaS) and connecting traditional on-premise solutions to those in the cloud

Two-tier ERP strategies: does it make sense for a multi-divisional company to standardize on one ERP, or to have one (or more) operational ERP’s coexisting with a corporate, administrative ERP?

Mashing up data from ERP with other applications and even external applications like Google Maps, Outlook and anything you can reach through a url.

Processing huge volumes of data in seconds or even nanoseconds

But the real bottom line in implementing ERP is just that… the bottom line. How does it impact cost and efficiency? What business benefits does it bring? And is anyone measuring? This is the subject of my recently launched survey.

If you have ERP, you have a chance to weigh in on how important these trends are to you and then see a summary of the results and engage in the discussion. Even if you haven’t invested in ERP yet, jump in. We want to hear about what you are doing now, what’s holding you back and what are your plans?

You might be asking yourself, “What’s in it for me?” I will share a copy of the Executive Summary of the findings with all participants and I am also offering access to Mint Jutras for questions and inquiry regarding ERP for 6 months after you take the survey. While contact info is optional, I will need your name and email address to deliver this to you. Don’t worry, this exercise is not a marketing ploy asking for your permission to share your contact info. It’s really just about the research, so don’t be afraid to have your voice heard.

A note to solution providers: Feel free to take the survey but ONLY IF you answer questions honestly as a user (not a provider) of ERP solutions. Or, if you prefer, pass this along to your customers. For more information on how you might participate (see and benefit from the results) please contact me at cindy@mintjutras.com.

“Mobility” seems to be all the rage these days. While mobile devices free us from wired connections, they actually seem to tether us more firmly to our businesses. Professionals are “always on” and “always connected” even when traveling for business, attending a child’s soccer game or on vacation. But do we really have better access to the enterprise data we use to make decisions and run our businesses? Is that connection a tether or a lifeline to the business?

Earlier this year I helped IFS North America with a study conducted to explore interest in and demand for mobile device access to enterprise applications. The study involved a survey of 281 executives of medium to large manufacturers with revenues over $100 million. We were looking to find out:

how enterprise software is currently accessed via mobile devices

what types of mobile applications and interfaces respondents are most interested in

how mobile interfaces may change the way we work

The enterprise applications we were explicitly interested in were

Enterprise Resource Planning (ERP)

Customer Relationship Management (CRM)

Enterprise Asset Management (EAM)

Business Intelligence (BI)

Only small percentages (27%) are currently performing functions in an enterprise application from their mobile device. This is likely influenced by the limited mobile connectivity of the enterprise applications themselves. Connectivity requires a modern underlying technology not available on legacy applications and older versions of software. While a negligible few rate their level of accessibility as excellent, a third to almost one half (varying by application) have little or no access at all. Interestingly, respondents accessing CRM via a mobile device are more likely to have access, but no more likely to rate it as excellent.

In general, we found manufacturing professionals view the mobile interface as an important consideration in enterprise software selection. The importance of the mobile interface increases proportionally as the amount of personal time invested in the job increases. Not surprising. Efficient use of time is even more important when it is your own.

Today the lines between work and private life are blurred, even in a traditional brick and mortar industry. Mobile access to enterprise software can facilitate this blended lifestyle, but what impact will it have on the way people work, how often they work and where they work? Will this drive new productivity for people who spend time in transit or in other locations where a hand-held, mobile device is the only viable tool? Will it cause work to increasingly encroach on personal time?

While 63% said that remote access would cause them to work more outside normal business hours, only 15% indicate remote access to enterprise data would be MORE disruptive. Easy access through a mobile device, anytime, anywhere, allows a decision maker to connect and act immediately without the disruption of finding an Internet connection and “firing up” – hence the importance of easy and intuitive access.

Mobile access to enterprise software appears to be a tremendous opportunity to increase productivity given that additional work can be completed while in transit, both inside and outside of work hours. While mobility is far from universally available today in enterprise applications, as software users recognize the value, software providers must necessarily respond with features and functions. The ability to connect and respond immediately improves productivity and far outweighs the cost of the intrusion of a mobile device.

Interested in all the full results of the “IFS ERP Mobility Survey; Overview and Projections on Remote Access to Enterprise Data?” Download at http://download.ifsworld.com/ERP_Mobility. (registration required)

I spoke with the folks at IFS today about their new IFS Touch Apps, which were announced at their customer summit last month. The first two applications in the series will go into early adopter stage after the summer holidays. Being headquartered in Sweden, those holidays are a bit longer and more pronounced than for those of us here in North America. These two (Trip Tracker for travel expense reporting and Notify Me for approvals of purchases, time, invoices and expenses) are envisioned to be the first of what IFS hopes to be a steady stream of such applications anticipated for 2012. Designed for the Android and iPhone devices and delivered via the IFS Cloud, they will run within Microsoft’s Windows Azure public cloud.

During our conversation, IFS CTO Dan Matthews mentioned these new applications will connect back to not only the current 8.0 release of IFS applications, but also prior releases back to 7.5. While its customers are anxious to take advantage of new technology, and indeed recognize the power of new mobile gadgets, they, like any ERP users, tend to be reluctant to go through the time, cost and effort required of an ERP upgrade. Right now IFS has no plans to go any further back, but demand from its customers (if it arises) could affect that decision in the future.

So that got me to thinking about the real impetus for going mobile today and I realized two different drivers were converging.

You hear the phrase “the consumerization of IT” a lot these days. It is really about the impact consumer technology is having on the work force and the enterprise. Indeed much of this is driven by youth that grew up surrounded by visual and audio stimuli that couldn’t even be imagined in my “youthful” days. So I use the term “youth” rather loosely, just like I use the word “kid” loosely. Most everyone under the age of 40 is pretty much a kid to me. No offense intended. The technology kids carry around today in their pockets is more powerful than the first computer I ever programmed and its footprint was at least 50 square feet in a specially air-conditioned room. And that didn’t include the key punch machines.

But don’t get me wrong, I’m not exactly a Luddite when it comes to technology clipped onto my waist, partly because these devices have become just so pervasive. My personal mobile device is a Blackberry. I haven’t started carrying an iPad or a Playbook or other tablet simply because they don’t do everything I need to do. If I can’t leave my laptop at home, I’m not about to carry yet another device. These things are supposed to lighten my load, not increase it. As a result of just my laptop and Blackberry though, I, like other business people, am virtually constantly connected except when I am asleep, am staying at our lake house in Maine or when I fly. I for one am just as glad that the airplanes I typically fly don’t have wifi and we just haven’t bothered to connect our house in Maine (no phone or TV either). And unlike some others I know, I actually know how to turn these devices off.

But as a prior corporate executive and now as a business owner, the line between my business and personal life has continued to blur and sometimes blend. While the connection through the mobile device can intrude on my personal life, it also helps limit the disruption by making the connection that much easier and more efficient. It is actually the productivity gains that draw me to mobile devices.

But the mobile device alone doesn’t do it for me, because texting and calling my BFF’s aren’t why I carry them. I carry them to get work done in a quick and efficient matter. This is exactly what IFS had in mind when they designed Trip Tracker and Notify Me. If indeed I had Trip Tracker I wouldn’t have spent more than an hour and a half this morning gathering, searching for, organizing and recording all my travel expenses accumulated during the recent “conference season.” Instead, they would have been all collected, digitized and organized for me even before I arrived back home from each trip.

In my current situation, Notify Me wouldn’t be of that much use to me. But it sure would have been useful in my last job in terms of approving expense reports, paid time off and invoices to be paid. Where those activities involved enterprise applications, I would have had to fire up my laptop, get a wireless connection, VPN in and only then would I have been able to approve items. And indeed sometimes getting through hotel firewalls, dealing with low bandwidth and then getting through our parent company’s firewall was more effort than I wanted to expend if I was going to be back in the office within a day or two. Just a few clicks on my mobile device would have been infinitely easier. Of course, I would have to convince IFS to provide the same support for my Blackberry as they do for Android and iPhone, but perhaps some of their customers will take up that cause.

I read today (http://tinyurl.com/4schf9f) that Oracle has acquired the IP for environmental reporting software created by Ndevr, a software firm based in Melbourne Australia. The software adds greenhouse gas and environmental reporting capabilities to Oracle’s E-Business Suite and JD Edwards Enterprise One. Ndevr has been a JD Edwards/Oracle certified partner for over 10 years.

This announcement comes just days after IFS announced the results of its Green Supply Chain survey (http://tinyurl.com/4oh92rh). IFS revealed in the announcement that almost 77% of manufacturers participating in the survey said they are currently required by their customers to report on their environmental impact and that of their products or require their vendors to do so. IFS went on to say, “…respondents indicated that their IT infrastructure, including enterprise resources planning (ERP) software, was not keeping up with their changing green supply chain needs, with 87 percent reporting that this data was handled at least in part through hard copy. Only five percent rated their ERP software as ‘excellent’ in its handling of green supply chain data while 54 percent rated their ERP solution as ‘poor’ or ‘not at all helpful’ in this regard. “

IFS addresses this apparent disconnect through IFS Eco-footprint Management which enables environmental impact to be traced along the entire value chain, from raw-material procurement and production to distribution and even through to the use of products post-shipment.

In addition, SAP has been particularly vocal about these issues and has been promoting its efforts in striving to be both an exemplar and an enabler. In fact Peter Graf, appointed as SAP’s Chief Sustainability Officer (CSO), leads both the corporate sustainability strategy as well as product development in the area of sustainability, thereby lending cohesiveness to both efforts. SAP BusinessObjects Sustainability Performance Management, SAP EH&S Management and SAP Carbon Impact are all part of the SAP offering to address these issues.

I just finished reading an interesting white paper written by IFS (an ERP solution provider that specializes in addressing the needs of complex manufacturing). The title – Lean Enterprise in Complex ETO (Engineer to Order). Drawing from works by Lean experts such as James Womack and Jerry Kilpatrick, the paper does a great job of educating the reader on the principles and benefits of Lean methodologies.

The paper rightfully identifies Lean’s heritage in more high volume, repetitive manufacturing. After all it was pioneered by Toyota. But it also makes a case for Lean in a low volume, highly complex environment. Seems like some of these low volume manufacturers have been listening. According to data collected by The MPI Group for its 2010/2011 Manufacturers Data Report on manufacturing metrics and best practices, low-volume/high-mix manufacturers are actually more likely to have adopted Lean Manufacturing methodologies than an average of all plants surveyed (66.1% of low-volume/high-mix versus 60.8% of all plants) and are also more likely to use the Toyota Production System (TPS) (13.3% of low-volume/high-mix versus 10.5% of all plants). They are also more likely to use pull systems with kanban signals and one-piece flow techniques to manage inventory. As a result, they were able to shave an average of 26% off manufacturing cycle times (versus an average of 14% across all plants) over the past three years and more than half (53%) were also able to increase inventory turns, with 8.8% increasing them by more than 20%.

So if you happen to be one of those complex manufacturers dealing with the challenges of a engineer to order environment and have not embraced Lean methodologies thinking they only pertain to a more simple, repetitive environment… think again.